Lenders rise to the demands of the home equity market by embracing new tools and modernized processes.
As home values soared throughout 2021, homeowners came to realize that they were sitting on a gold mine. After accumulating, on average, about $50,000 in additional home equity that year, thoughts turned to tapping into that wealth. Demand for home equity loans and lines of credit began climbing and hasn’t slowed down since.
“High demand has lenders taking a fresh look at their home equity products and services,” says Barry Coffin, managing director, Home Equity Title Operations, ServiceLink. “How can they create an exceptional borrower experience while reining in the costs of producing a loan? Technology and process innovations are key: Advances in title and close, flood and valuations are all reducing the time and cost of getting borrowers to the closing table.”
Lenders who share the mindset of the tech-savvy borrowers seeking loans and lines are poised to cash in on the current home equity boom, explains Sandeepa Sasimohan, vice president, Title Automation, ServiceLink. “Product innovation is essential in this market, whether lenders are trying to gain or retain customers. Borrower demographics are leaning heavily toward the mobile-first generation, which expects technology to clarify and enhance their journey. Innovations can set lenders apart in this competitive environment.”
Home Equity Innovations for Speed: The Latest Technology, Processes and Products
For home equity transactions, speed is the name of the game. Borrowers expect it and lenders benefit from it, in not only capturing market share but also lowering costs. Coffin says that streamlined settlement processes can play a huge role in enabling lenders to meet their home equity application-to-close goals.
“Your service partner should provide support that helps you shrink transaction turn times, whether you are working toward bringing your average close from 35 days down to 10, or from 10 days down to three to five,” he says. “We do this at ServiceLink by applying advanced technology — digital title solutions, automated inspection and appraisal tools, consumer-facing scheduling apps and eClosing options — and working with you to optimize your internal workflows and processes.”
In addition to providing a holistic home equity solution that includes a full spectrum of customizable title, closing, flood and valuation products, ServiceLink recently introduced Equity View, a comprehensive report that provides all the information lenders need to originate a home equity loan:
- A property report built on title-grade plant and repository data that includes vesting information, a legal description, mortgage/deed of trust information, tax information and status of any involuntary liens of record
- Automated valuation model (AVM) reports that simplify and expedite the valuations process by providing market value data, property details, satellite photos, etc.
- Flood zone determination materials that include a Life of Loan Flood Certificate, Notice to Borrower and aerial images to support the flood insurance assessment
Tech-enabled Title Solutions
Sasimohan points out that many of the innovations that have been gaining traction in refinance markets can be applied to home equity with exceptional results. Instant title is a perfect example. Lenders who used instant title technology as refinances were surging benefited tremendously from receiving accelerated title information.
With an instant title report, home equity lenders can provide borrowers with a closing timeline at the very beginning of the home equity lending process, helping to ease the uncertainty often associated with a major financial decision like a home equity loan. It also reduces the overall origination cycle time, helping lenders meet their turn time goals.
ServiceLink combines this efficiency with a commitment to quality. Backed by Fidelity National Financial, ServiceLink has access to robust, quality property data sources - nationwide. With our scale and cascade of title offerings, lenders can ensure their underwriting requirements are met whether that means legal and vesting or property reports or full instant title commitments. Lenders can easily transition between uninsured and insured based on underwriting.
State-of-the-Art Closing Options
Technology facilitates home equity closings as well, through tools such as(1) EXOS® Close, an app that enables the borrower to self-schedule their closing by gaining direct access to signing agents’ availability, and (2) remote and hybrid signing options. Each of these helps lenders create a differentiated customer experience that includes getting to the closing table faster.
Looking first at the consumer-facing digital scheduling technology, EXOS Close has the potential to shave days off the application-to-close journey: Almost all the consumers who have used it to date selected the first available day to close. The app has reduced reschedules, too — by nearly 100%. Closing appointments are confirmed within five minutes, and the lender receives notifications of key milestones for transparency throughout the process. Unsurprisingly, consumers appreciate the speed and convenience of self-scheduling: In a recent survey, 83% said they would be at least somewhat likely to self-schedule their closing appointment if provided with that option.
Moving on to remote and hybrid signing options, most states have enacted either permanent or temporary legislation that allows signings to take place virtually. Lenders equipped to accommodate requests for fully remote eClosing options — remote online notarization (RON), remote ink-signed notarization (RIN) and in-person electronic notarization (IPEN) — and hybrid signings can not only provide borrowers with convenient alternatives to traditional in-person signings, but also streamline their processes and free notaries to certify more documents in less time. Using IPEN or hybrid closings, lenders can experience the benefits of electronic notarization while still closing in-branch.
Notary quality is, of course, critical. Coffin recommends consolidating the signing experience under a single provider that can manage eSign and remote online notarizations, as well as traditional wet signs. “ServiceLink’s single signing solution combines an experienced, accessible network of real estate notaries and attorneys with EXOS Close technology, which enables the borrower to control the timing and format of their closing,” he says. “This process expedites scheduling the appointment, getting the documents back and receiving notification that the loan has closed — stages in the process that can take much longer and require much more effort when multiple providers are involved.”
Innovative Flood Solutions
At a time when flood maps are constantly changing, technology helps ensure that lenders can quickly assess whether a home equity property requires flood insurance. ServiceLink Flood allows lenders to customize product based on their risk appetite and borrower needs. For example, QuickCheck technology provides an instant response informing lender and borrower whether the subject property is in or outside of a FEMA Special Flood Hazard Area (SFHA). For properties that require flood insurance, ServiceLink’s InstaQuote quickly researches insurance costs. Then the lender can obtain a Basic Flood Zone Determination and Life of Loan Flood Zone Determination.
Another exclusive ServiceLink tool, CertMap® helps minimize borrower disputes by clearly illustrating why flood insurance may be required. CertMap incorporates high-resolution FEMA images, digital road layers, and full-color satellite and aerial images to disclose a property's proximity to the FEMA flood zone.
Accelerated by pandemic demands for minimal-contact appraisals, and bolstered by the support of Fannie Mae and Freddie Mac, appraisal modernization is sweeping the industry. Home equity borrowers and lenders alike are benefiting from new technology that runs the gamut from instant digital scheduling to automated inspections and valuations.
On the lender side, ServiceLink offers valuations products ranging from desktop appraisals, AVMs and hybrid valuations to traditional full appraisals. The EXOS platform helps streamline internal processes and workflows through technology that includes an automated quality control review process, which ensures appraisals are aligned with each lender’s unique underwriting requirements. ServiceLink’s dedicated home equity operations and customer service team, and experienced national appraiser panel back this technology with human expertise.
On the consumer side, the EXOS® Valuations self-scheduling app enables borrowers to schedule their inspections within minutes or even seconds when an appraisal is required, which saves time and offers transparency. Borrowers know who will be inspecting their home and what type of vehicle they can expect them to arrive in. In many cases, technology makes the inspection process quicker and more accurate than before: A mobile app guides the user to ensure a full view of the entire home, and specially designed camera equipment captures high-quality, 3D images and automatically fills in the data collection report.
Home Equity Success: The Right Partnership Makes the Difference
Technology can be an amazing tool for building efficiency, accuracy and transparency into your home equity processes. But getting the most from these innovations and advances requires having a knowledgeable, experienced, committed technology partner.
ServiceLink fills the bill by meshing innovative home equity technologies with expertise and insight unrivaled in the mortgage industry. Our teams know how to leverage technology to its fullest, including customizing solutions to meet your unique requirements, minimizing your exposure to operating and financial risk, and navigating situational complexities as they arise. We can help you develop and implement high efficiency processes and create a customer experience that gets borrowers to the closing table fast and truly sets you apart from the competition.
Backed by Fidelity National Financial, ServiceLink provides access to exceptional data resources and the assurance of stability that stands the test of time. We can help you scale up or down quickly as market demand fluctuates, while consistently delivering cost-efficient borrower experience. Our goal is to help you, and the industry, move forward on this digital journey with confidence and ease.
Reach out to us today to see how ServiceLink and our EXOS technology can support your home equity efforts.
(1) Chris Arnold, npr.org, January 20, 2022, Home prices rose faster than ever in 2021. The typical home gained $50,000 in value. https://www.npr.org/2022/01/20/1074377076/home-prices-rose-faster-than-ever-in-2021-the-typical-home-gained-50-000-in-valu.